Economic expansion born by private hands and reforms

Publiceret 04-09-2018

The Danish economy is in a boom phase. Employment is rising rapidly and is at a record high. There is a solid foundation for continued expansion.

Economic Survey, August 2018 shows that the Danish economy is well into a boom phase. Total employment has never been higher, and in the first quarter of 2018 alone employment increased by more than 15,000 persons. This is the largest quarterly increase in employment for ten years. Since 2013, more than 190,000 private sector jobs have been created.

We have a strong Danish economy thanks to reforms. A shorter unemployment benefit period, a later retirement and early retirement age, and lower taxes on employment have provided the basis for a sustained improvement in employment. Reforms will also increase labour supply in the coming years. This allows employment to increase further without the labour market becom-ing overheated.

There is a solid foundation for the expansion in the Danish economy to continue both this year and the next, with private consumption and private investments as the main drivers behind growth. Growth is expected to bring another 75,000 persons into jobs, so close to 3 million will be in employment by 2019.

The Danish economy is robust but also faces several challenges and risks. There are fewer avail-able resources in the Danish economy, competition for foreign labour is becoming more intense, and the risk of an escalating global trade dispute is becoming more present.

I am pleased that we have a strong and privately born economic expansion. But we also have to be aware of the risks to the Danish economy. We cannot take the tailwind from the global econ-omy for granted, and domestically there is a growing concern about the amount of available labour supply. The increasing capacity pressure in the Danish economy requires a safe man-agement so that the boom phase can last, and more persons can replace public transfers with work. The good development also calls for new reforms that can boost growth and employment in the years to come.